Is Angel Investing For You?

If you are reading this blog it is likely because you are looking to buy a business or are interested in Entrepreneurship in general.

As a business broker, I am a strong advocate of buying existing, proven businesses.  The ability to buy a proven concept, that has good systems in place, and positive cash flow is far less risky than starting a new business.  Yet, I certainly understand the allure of a start-up.  I find that some business buyers would find a start-up to be more interesting, but they aren’t sure they want to make the heavy time and energy commitment that a start-up requires.

There may be an interesting option for such business buyers:  become an Angel Investor, providing capital and expertise to start-up businesses.  Of course, there are some obstacles that may be daunting:  1, how to gain exposure to a wide variety of start-ups so that you can make the best possible choice;  2, the risk – if you drop $50k into a start-up and it fails, there is a high probability of losing your investment;  and 3, while you may have a strong track record of running a business are you confident of your ability to understand the risk factors and markets for the businesses in which you invest – in other words are you confident you will always even know the right questions to ask?

Let me offer a solution:  Oregon Angel Fund (OAF).  Oregon Angel Fund is a highly structured, professionally managed, investor-driven angel fund. The fund provides accredited investors privileged access to the most promising startups and early-stage growth companies in Oregon and SW Washington.

OAF launches a new $3M+ fund each spring. Each annual fund aims to place 4-5 investments over a 12-month active investing period, followed by another 10 years of fund life to grow and exit each portfolio. The fund typically invests $400k-$600k per deal with individual OAF members and venture capitalists investing alongside and after OAF.

Since OAF is well-known in the start-up community there is a steady flow of potential deals to be evaluated.  The participants in OAF are required to invest a minimum of $25k, but their money is pooled with others and invested in 4-5 businesses, so the investor gains more diversification than if they were investing individually in just one company.  Members of OAF are actively involved with due diligence on companies, so the investor benefits from the knowledge, experience, and insights of the group, rather than on one individual’s judgement.

To join the group you must be an accredited investor.  To be considered an accredited investor, an individual must have a net worth of at least $1 million or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year.

For more information on OAF please view its website:  www.OregonAngelFund.com